Hong Kong - Asian markets rallied on Monday with financials up on easing fears about the future of German giant Deutsche Bank after a source said it was nearing a deal to slash a multi-billion-dollar US fine.
Traders fled for cover last week, ending stocks reeling on Friday, after US officials slapped the lender with a $14bn charge over its role in the subprime mortgage crisis.
The gigantic figure fuelled fears the bank could go under and spark another global financial downturn, while Bloomberg News said several hedge funds had withdrawn their investments in the firm - though the company said it was in a "stable financial position".
However, on Friday, a person familiar with the matter told AFP that the German bank is near an agreement to pay a much more manageable $5.4bn to resolve the case.
"Investors were nervous about the uncertainty surrounding Deutsche Bank and the potential spill over effect on other European banks, but the mood is to take a wait-and-see approach for now," Yutaka Miura, senior technical analyst at Mizuho Securities Company in Tokyo, told Bloomberg News.
In Japan, the Nikkei ended the morning session 1.1% higher, with investors brushing off the closely watched Tankan survey showing Japanese business confidence at its lowest in three years.
Hong Kong gained 1.4%, Sydney climbed one percent and Singapore put on 0.3%. There were also strong gains in Jakarta, Taipei and Manila. The advance tracked a rally on US and European markets.
Lenders boosted
Among the main winners were bank, with Sydney-listed Commonwealth Bank up 1.6%, while HSBC was up a similar amount in Hong Kong. Mitsubishi UFJ Financial Group added more than one percent in Tokyo.
Shanghai, Seoul and Kuala Lumpur were closed for public holidays.
In currency markets, the pound slid against the dollar after British Prime Minister Theresa May set a timetable to leave the European Union by 2019.
The announcement sets up Britain for years of horse trading after June's shock referendum vote to leave the EU.
Sterling fell to $1.2926 from $1.2974 in New York late on Friday, while it also eased to €1.1513 from €1.1543.
"We're back to the Brexit risks," Vishnu Varathan, a senior economist at Mizuho Bank in Singapore, said.
"Sterling has taken a bit of a knock first. If the concerns become wider concerns about financial market contagion we will find that the slight softening that we've seen in the dollar trend will be shaken off."
Read Fin24's top stories trending on Twitter: Fin24’s top stories